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Explosion in Apartments for Rent to Tourists

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Explosion in Apartments for Rent to Tourists

Between 1,500 and 2,000 apartments in Reykjavík, the majority in the downtown area, are currently being rented out to tourists.

Of these, at least 340 are part of registered apartment hotels. By comparison, there are 41 rooms at Hotel Holt and 209 at Hotel Saga.

Morgunblaðið reports today that it appears that the number of rental apartments in Reykjavík has increased beyond the increase in foreign tourists and the growing number of hotels in the coming years will increase competition further.

Hlín Gunnarsdóttir, owner of apartment hotel Forsæla in downtown Reykjavík, says the increase is unsustainable and is a “bubble waiting to explode.”

Some apartment owners, such as Halldór Meyer of Stay Apartments, which consists of 70 apartments, have had to lower their rental prices over the summer due to the large increase in apartments on the market.

The lack of affordable housing in central Reykjavík has in part been attributed to the increase in apartment owners renting out their accommodation to tourists. The Social Democrats, who formed a majority in Reykjavík after the municipal elections in late May, promised in their election campaign to build 2,500-3,000 residential apartments in Reykjavík in the coming years to help address the problem.

By the end of 2017, there will be an estimated 5,700 hotel rooms (excluding apartments) in Reykjavík, up from 900 in 2000. Of this number, 2,300 rooms will have been added since 2008.